Rite Aid is closing even more stores, adding over 20 to the already long list of more than 200 closures. The pharmacy chain filed for Chapter 11 bankruptcy last October and is struggling with a huge debt of $3.3 billion.
Rite Aid Closure Numbers Keep Rising
More Rite Aid stores are closing as the company struggles with bankruptcy. WZZM-TV reported on Monday that additional stores have been added to the closure list.
Documents reveal that 27 more stores in the Midwest will close soon, including 12 in Michigan and 15 in Ohio. Initially, the company, based in Camp Hill, Pennsylvania, had planned to shut down 154 stores, with the most closures in Pennsylvania and California.
However, since November 2023, the closure list has expanded to include over 200 additional stores, per Supermarket News.
In late March, a U.S. judge allowed Rite Aid to start the voting process on a bankruptcy restructuring plan. This plan would transfer most of the company's ownership to its bondholders and keep the possibility of selling the company open.
U.S. Bankruptcy Judge Michael Kaplan emphasized the need for the bankruptcy proceedings to advance quickly to avoid extra restructuring costs, which could force the company into liquidation.
Rite Aid filed for bankruptcy in October, dealing with a $3.3 billion debt. As of May 14, Rite Aid operated 1,687 locations, according to ScrapeHero data.
Local station CBS News has reported that Rite Aid plans to close 12 stores in Michigan and 15 in Ohio as part of its ongoing restructuring efforts.
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Rite Aid Closures Impact Multiple States
Hundreds of Rite Aid pharmacy locations have shut down since last October due to financial difficulties.
The pharmacy chain explained that it evaluates its retail operations regularly to ensure they are efficient and meet the needs of customers, communities, and employees while supporting the business's overall health.
Rite Aid has informed the court about closing certain underperforming stores as part of the bankruptcy process, which the court supervises. This move aims to reduce rent expenses and enhance the company's financial stability.
The store closures are not just limited to Michigan and Ohio; they also affect other states, including Pennsylvania, California, New Jersey, New York, and Virginia.
In October, the company filed for bankruptcy protection with a plan to shut down underperforming stores, sell its pharmacy benefits management business Elixir, and address various opioid lawsuits.
The U.S. government has accused Rite Aid of dispensing illegal opioid prescriptions.
Moreover, Rite Aid faces about 1,600 lawsuits from state and local governments, hospitals, and consumers. Despite denying any misconduct, the company seeks to resolve the opioid litigation equitably through the bankruptcy proceedings, as reported by The U.S. Sun.
Rite Aid isn't the only pharmacy chain reducing its number of stores. Walgreens and CVS are also planning closures amid increasing competition and rising incidents of theft.
According to a recent earnings call with analysts, as the New York Post reported, Walgreens' CEO Timothy Wentworth announced that the company plans to decrease its nationwide presence by approximately 200 stores during the fiscal year 2024.
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